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2021 (4) TMI 32 - HC - Income TaxDepreciation allowable in respect of the property acquired in exchange of relinquishment of tenancy right in another property - HELD THAT:- As in the assessee's own case [2012 (9) TMI 555 - MADRAS HIGH COURT] as the agreement with the landlord, which showed the payment of consideration for the surrender of tenancy rights. Revenue does not dispute the existence of such an agreement. It is also not disputed by the Revenue that the purchase of the premises by the assessee was from M/s. Harsaran Singh Constructions Pvt. Ltd., which had nothing to do with the landlord. Given the fact that tenancy right is a capital asset, as held by the Apex Court in the decision reported in CIT v. D.P. Sandu Bros. Chembur (P.) Ltd. [2005 (1) TMI 13 - SUPREME COURT] that the surrender of tenancy rights amounted to transfer and hence, being a capital receipt, on the facts thus placed before this Court that the amount paid on account of surrender of tenancy rights being given by the assessee to the builder, there is no exchange of one property for the other. Hence, we have no hesitation in accepting the plea of the assessee, thereby rejecting the Revenue's contention raised in all these Tax Cases. Depreciation u/s 32 on non compete fee - whether it is an asset in the nature of patents, copyrights, trademark, licence, franchises or any other business or commercial right of similar nature? - HELD THAT:- Before us, a chart has been filed showing the issue relating to depreciation on non compete fee. From the chart, we find that for the assessment year 2001-02, the Assessing Officer himself allowed it, which was confirmed by the CIT(A) and the decision of the CIT(A) was accepted by the Department. For the assessment year 2002-03, no scrutiny assessment had been carried out. For the assessment year 2003-04, the CIT(A) allowed it and the Assessing Officer gave effect to the order passed by the CIT(A). For the assessment year 2004-05, no scrutiny assessment was carried out and for the assessment year 2005-06, the claim was allowed by the CIT(A) and it was given effect to by the Assessing Officer. Thus, the Assessing Officer was bound to be consistent with the earlier decisions.Therefore, we find that the Tribunal rightly granted relief to the assessee. Income from business - Whether the net book value of the entity taken over by the assessee over and above the consideration paid for acquiring three companies would not fall within the ambit of the provisions of Section 28(iv)? - HELD THAT:- Assessing Officer treated the transferred amount as income in the hands of the assessee, which was reversed by the CIT(A) concerned, which order was upheld by the Tribunal. The order passed by the Tribunal was reversed by this Court holding that the amounts, which were transferred to the assessee company represented various credits and deposits during the trading with the erstwhile company and the amount remained for a long time for recovery and remained unclaimed. The amounts were then transferred by the assessee-company to the general reserve treating it to be as profits and therefore, on facts, the decision in the case of CIT Vs. T.V.Sundaram Iyengar & Sons Ltd. [1996 (9) TMI 1 - SUPREME COURT] would apply on all fours. Therefore, it was contended that the amount of credit balances written off and transferred to the general reserve account had to be treated as income of the assessee chargeable to income-tax. We find this decision to be wholly inapplicable to the facts and circumstances of the case on hand. For all the above reasons, we find that the Tribunal was right in granting relief to the assessee under the said head.
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